The US-China "AI war" is in full swing, following the premiere of the new artificial intelligence model, the Chinese hurricane named DeepSeek, which is sweeping American markets.
The emergence of DeepSeek, the Chinese artificial intelligence startup, overturned within a few hours the narrative of US dominance in Artificial Intelligence (AI) and caused turmoil in the stock markets.
DeepSeek has unveiled a new AI language model that is as powerful as those from OpenAI and Google, but at a drastically lower cost compared to AI companies in the US. The AI chatbot from Chinese company DeepSeek became the most popular free app in the Apple store in just one day, surpassing OpenAI's ChatGPT, after its launch in January in the US.
It is an upgraded, low-cost AI model that is considered to have amazing results, causing headaches on Wall Street and concern in the Technology industry.
"This chatbot is one of the most amazing and impressive developments in Artificial Intelligence," said Silicon Valley entrepreneur Marc Andreessen.
What is DeepSeek?
DeepSeek is a Chinese Artificial Intelligence company founded in Hangzhou, a city in southeastern China. The company was launched in July 2023, but its popular app was launched in the US on January 10, 2025.
Who is the founder of DeepSeek?
The founder is named Liang Wenfeng and he funded DeepSeek using money from an investment fund.
The 40-year-old, a graduate of electronic and computer engineering, allegedly amassed a large stockpile of Nvidia A100 chips, which are no longer allowed to be exported to China.
According to experts, this collection - estimated to include around 50.000 chips - led him to found DeepSeek, combining them with cheaper and lower-performance chips, which are still imported into the country.
Liang was recently seen at a meeting between industry experts and China's Premier Li Keqiang.
Who uses it?
The company's Artificial Intelligence app is available to everyone on Apple's App Store and through its website.
The service, which is free, quickly became the most downloaded app in the Apple store, although there were some reports of problems with user registration.
It has also become the highest-rated app in the US, in the free apps category of Apple's App Store.
How the app works
DeepSeek has become popular because of its powerful Artificial Intelligence chatbot that works similarly to ChatGPT.
The app is similar to its competitors, such as ChatGPT: By typing any question, it generates answers – without creating images so far. The app is available on iOS and Android devices at no charge.
Like other AI models, the model that powers DeepSeek can process and filter vast amounts of data to identify patterns, make predictions, and solve problems. The model has been “trained” on data up to July, so it doesn’t know about more recent events.
According to its description on the App Store, the app is designed "to answer your questions and effectively improve your life."
User reviews of the app say it “brings text to life.” However, DeepSeek’s chatbot avoids politically sensitive questions.
It is safe;
Like most applications, DeepSeek can collect and store a huge amount of personal information.
The app also appears to align in some cases with China's strict internet censorship rules, meaning it censors certain information - such as any reference to the Tiananmen Square protests in 1989.
What is the difference between DeepSeek and ChatGPT?
DeepSeek has capabilities similar to ChatGPT and other AI models, such as Google's Gemini, Meta's Llama, and Anthropic's Claude. However, according to DeepSeek researchers, they have developed techniques to make the initial training and development of their model much more efficient.
Why it hurts American companies like Nvidia
The emergence of the new artificial intelligence model caused a frenzy on Wall Street, reigniting public debate about the economic and geopolitical competition between the US and China in the field of high technology.
Stock prices related to Artificial Intelligence have skyrocketed to new highs in the last two years, while its premiere led to losses of $1 trillion in the leading US technology index, the Nasdaq.
The fact that DeepSeek was reportedly developed at a much lower cost than its US competitors has raised questions about the future of American dominance in AI. Its success shatters the notion that the best and most expensive chips are the only means to develop AI.
Nvidia, an American company that makes powerful chips for Artificial Intelligence, appears to have been hit hardest. It lost almost $600 billion in market value on Monday (27.01.2025) - the biggest one-day drop for any company in US history - as its share price fell 17% during the day.
Nvidia was the world's most valuable company by market cap, but it fell to third place behind Apple and Microsoft yesterday, when its value fell to $2,9 trillion from $3,5 trillion, according to Forbes.
DeepSeek uses less advanced semiconductor chips than those made by Nvidia.
Source: newsit
